Abstract

Economic development was from the very beginning the focus of classical political
economy and presently retains its original human welfare mission and
intellectual attraction through insightful anthropological, sociological, and
historical investigations.1 Within the context of complex and constantly evolving
sociospheres, the objective of a sustained better life for the masses is enhanced,
according to Nobel Prize winner Amartya K. Sen (1983, 1988), by functionings
and entitlements which cannot be implemented without a public commitment and a
deep government involvement.
Notwithstanding the inevitability of semantical differences, the real challenge of
development does not lie in eliminating definitional disputes pertaining to the objective
of development but in illuminating those pertinent instrumental relations
which are relevant in each social milieu, and which, when properly activated, generate
an internal development dynamic. Such a dynamic would exhibit characteristics
of uniformity in countries with high degrees of similarity in human and natural
resources, in institutions and in individual preferences. If advanced industrial countries
converge toward similar patterns, the same cannot be observed in developing
countries whose differences are more pronounced than their similarities. The task
of establishing meaningful patterns of uniformity in the highly differentiated developing
world is not easy, but if accomplished, it would guarantee substantial benefits
in the formulation of effective strategies and policies.
An area in which the search for such patterns goes on unabated is that of international
trade and openness. Forces of dependence, autarky, balance of payments,
international competition, vulnerability to external shocks affect the objective of
developing countries to achieve some degree of balanced growth,2 and most certainly
influence their patterns of trade. Although these forces are important, they
are beyond the scope of this paper, which focuses on the investigation of possible
trade patterns and their impact on growth.
In the course of this investigation the paper is organized as follows. In the next
section the role of openness is examined along with citations of empirical studies
that analyze the impact of export growth and export growth volatility on the growth
of GNP. In the third section the rationale of Granger causality, which constitutes the
core of the paper, is presented, followed by short sections on unit root tests, cointegration
tests, and volatility tests that are accompanied by a brief analysis of the respective
statistical results. In the final section the conclusions of the paper are summarized.

Item Type:

MPRA Paper

Original Title:

Output growth and the variability of exports and imports growth: international evidence from Granger causality tests